Staff who are moved on to part-time hours because of the recession should receive government subsidies to top-up their salaries, according to MPs.
Labour backbenchers want ministers to use a £100?million fund earmarked for training to subsidise the wages of workers in the manufacturing sector, particularly the automotive and steel industries.
Black Country MP Adrian Bailey (Lab West Bromwich West) is leading calls for Treasury support to ensure businesses retain their skills base. He said he had been approached by businesses which had been forced to move staff on to “short-time” hours because of lack of demand for their products. For example, full-time staff might be told they were needed only two or three days a week.
Suppliers in the automotive industry and smaller businesses in the steel industry had been particularly hard hit, he said.
In theory, staff will be moved back on to full-time contracts once the recession is over and demand picks up. But there are fears that employees whose working hours and wages are reduced will simply leave the industry and get jobs elsewhere, reducing the manufacturing skills base in the West Midlands.
In a Commons motion backed by a range of MPs, including Wolverhampton North East MP Ken Purchase and former Health Secretary Frank Dobson, Mr Bailey urged the Government to consider “all options” for keeping skilled workers in manufacturing.
He has met ministers including Business Secretary Lord Mandelson and Employment Minister Pat McFadden (Lab Wolverhampton South East) and urged them to make cash available from a £100?million training programme called “train to gain”.
This provides vocational training to staff over 25 who are in work and do not have many qualifications.
Mr Bailey said he hoped the scheme would be expanded to subsidise salaries for people on short-time working.
He said: “We had something similar in 1979 and a lot of Black County firms have told me they would like to see it reintroduced today.
“What we are asking the Government to do is to use some of the skills budget, such as the Train to Gain budget, to top up some of the wages of the workers on short-time, so that they sustain their incomes.
“If people’s wages are cut in half then some of them are going to find other jobs, even in the current economic circumstances. But once skills are lost, it is very hard to get them back.
“We need to make sure businesses in the West Midlands are ready to hit the ground running when the recession ends, and that means retaining the skills base.”
The Train to Gain initiative, launched nationally in 2006, originally included funding of £65 million. Lord Mandelson announced last month that an extra £35?million would be made available for the automotive industry to train employees.
Carmaker Jaguar Land Rover, which has plants in Birmingham and Solihull, has also expressed concern about the effects of the recession on the skills base. The business last year cut production of the XJ and XK lines in Castle Bromwich, Birmingham, to four days a week, but staff returned to working full five-day weeks on Monday.
A survey by the British Chambers of Commerce found that 39 per cent of businesses are planning to cut hours.